The complaint
Benjamin Serebrin and Joshua Rubin, two former Groq engineers who hold common stock in the company, filed suit in Delaware on Friday over the roughly $20bn arrangement Groq struck with Nvidia in December 2025. National Technology News reported that the plaintiffs say the board improperly sold the company’s core assets and its best employees to Nvidia without securing the right price or structure for shareholders, and that conflicts of interest shaped the negotiation.
Their lawyers argued that the board “took billions of dollars in benefits for itself, senior management, and affiliated funds that it did not share with Groq’s other stockholders”. The suit also says common stock was valued at a discount while separate compensation went to those relocating to Nvidia.
The structure at issue
Nvidia did not buy Groq. It entered a non-exclusive licence for Groq’s language processing unit technology and hired a set of Groq employees, leaving Groq nominally independent. Of the roughly $20bn, about $17bn went to Groq’s backers as licensing payments and about $3bn took the form of an Nvidia stock pool for roughly 200 engineers who joined Nvidia, according to Crypto Briefing.
That split is what the case turns on. A sale of the company would have required a stockholder vote and would have distributed proceeds through the capital structure. A licence plus a hiring round does neither, which is precisely why the shape has become common in AI over the past two years — and why two different authorities are now looking at the same transaction from opposite ends.
Groq’s response, and the antitrust thread
Groq called the lawsuit “meritless” and said the agreement with Nvidia “delivered exceptional value for Groq”. Nvidia declined to comment.
The Delaware claim runs alongside a Justice Department antitrust investigation opened in September into whether the deal’s structure was designed to avoid the premerger notification that an acquisition would have triggered. The two proceedings ask different questions — one about duty to shareholders, one about merger review — but both start from the observation that a licence that moves the technology and the team is not obviously distinguishable from a purchase.
Delaware’s Court of Chancery is the venue that decides what a board owes common stockholders when it chooses a structure, and it has been the forum for the most consequential corporate governance rulings of the last decade. What to watch is whether the court treats the licence-and-hire as a transaction requiring a vote, because that answer would apply well beyond Groq.
